A startup is a company designed to grow
fast. Being newly founded does not in itself
make a company a startup. Nor is it necessary
for a startup to work on technology, or take
venture funding, or have some sort of "exit."
The only essential thing is growth. Everything
else we associate with startups follows from
A startup is a human institution designed to
create a new product or service under
conditions of extreme uncertainty.
Entrepreneurship is management.
If the fundamental goal of entrepreneurship is
to engage in organization building under
conditions of extreme uncertainty, its most vital
function is learning.
Unfortunately, “learning” is the oldest excuse in
the book for a failure of execution.
Adopt the view that your job is to find a
synthesis between your vision and what
customers would accept; it isn’t to capitulate to
what customers think they want or to tell
customers what they ought to want.
The point is not to find the average customer
but to find early adopters: the customers who
feel the need for the product most acutely.
It is often easier to raise money or acquire
other resources when you have zero revenue,
zero customers, and zero traction than when
you have a small amount.
This phenomenon creates a brutal incentive:
postpone getting any data until you are certain
Genchi Gembutsu: "go and see for yourself"
You cannot be sure you really understand any
part of any business problem unless you go
and see for yourself firsthand.
"If you don't go, you don't know"
Lean UX recognizes that the customer
archetype is a hypothesis, not a fact.
The customer profile should be considered
provisional until the strategy has shown via
validated learning that we can serve this type of
customer in a sustainable way.
The fastest way to get through the Build-
Measure-Learn feedback loop with the
minimum amount of effort is via a MVP.
The goal of the MVP is to begin the process of
learning, not end it.
Before new products can be sold successfully
to the mass market, they have to be sold to
early adopters. These people are a special
breed of customer. They accept—in fact
prefer—an 80 percent solution; you don’t need
a perfect solution to capture their interest.
The lesson of the MVP is that any additional
work beyond what was required to start
learning is waste, no matter how important it
might have seemed at the time.
27. Measure: Innovation accounting
1. Establish the baseline
a. Build an MVP
b. Measure how customers behave right now
2. Tune the engine
a. Experiment to see if we can improve metrics from
the baseline towards the ideal
3. Pivot or persevere
a. When experiments reach diminishing returns, it is
time to pivot
This is the pattern: poor quantitative results
force us to declare failure and create the
motivation, context, and space for more
30. Measure: Using kanban
Stories could be cataloged as being in one of
four states of development: in the product
backlog, actively being built, done (feature
complete from a technical point of view), or in
the process of being validated.
Validated was defined as “knowing whether the
story was a good idea to have been done in the
Pivot is to change direction while keeping a
foot on sure ground.
A pivot is better understood as a new strategic
hypothesis that will require a new MVP to test.
A startup's runway is the number of pivots it
can still make.
The more money, time, and creative energy
that has been sunk into an idea, the harder it is
Remember, if we're building something that
nobody wants, it doesn't much matter if we're
doing it on time and on budget.
33. Pivot: Kinds
● Zoom in
● Zoom out
● Customer segment
● Customer need
● Bussiness architecture
● Value capture
● Engine of growth
Working in small batches ensures that a startup
can minimize the expenditure of time, money,
and effort that ultimately turns out to have been
By reducing batch size, we can get through
the Build-Measure-Learn feedback loop
more quickly than our competitors can.
The ability to learn faster from customers is the
essential competitive advantage that startups
Large-batch death spiral: the larger the batch,
the higher the pressure to deliver a high-quality
version of the product.
In light of how long the product has been in
development, why not fix one more bug or add
one more feature? Who really wants to be the
manager who risked the success of this huge
release by failing to address a potentially
Pull, don't push: avoid stockpiled Work In
Progress. Experiments should pull the
Build-Measure-Learn => Learn-Measure-Build
Sustainable growth: New customers come
from the actions of past customers.
● Word of mouth
● Side effect of product usage
● Funded advertising
● Repeat purchase or use
42. Grow: Engines of growth
● Relies on high customer retention rate.
● Key is for new customer acquisition exceed
43. Grow: Engines of growth
Many viral product do not charge customers
directly but rely on indirect sources of revenue
such as advertising.
Customers are not intentionally acting as
evangelists, growth happens automatically as a
side effect of customers using the product.
44. Grow: Engines of growth
● Marginal profit, the margin between LTV
(customer lifetime value) and CPA (cost per
● Relies on paid advertising
46. Adapt: The five whys
The core idea of Five Whys is to tie
investments directly to the prevention of the
most problematic symptoms.
Adopt these simple rules:
1- Be tolerant of all mistakes the first time
2- Never allow the same mistake to be made
As the company grows, keep innovating. Build
small teams of entrepreneurs within the
company to have a diverse portfolio and keep
Create a sandbox for innovation that will
contain the impact of the new innovation but
not constrain the methods of the startup team.
Startup teams require three structural
● scarce but secure resources,
● independent authority to develop their
● and a personal stake in the outcome.
The innovation team should be cross-functional
and have a clear team leader.
It should be empowered to build, market, and
deploy products or features in the sandbox
without prior approval.
It should be required to report on the success
or failure of those efforts by using standard
actionable metrics and innovation accounting.
For all of our vaunted efficiency in the making
of things, our economy is still incredibly
This waste comes not from the inefficient
organization of work but rather from working on
the wrong things - and on an industrial scale.
As Peter Drucker said, “There is surely nothing
quite so useless as doing with great efficiency
what should not be done at all.”
By focusing on functional efficiency, we lose
sight of the real goal of innovation: to learn that
which is currently unknown.
54. User-centered design
No matter how many users you talk to, no
matter how much data you collect, at the end of
the day, a human has to decide.
No amount of data analysis can make up for a
lack of talent.
55. User-centered design
Users and their data should be there to inform
designers, not to substitute for them.
Great ideas can't be tested. Only mediocre
ideas can be tested.